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Methodology for rating personal loans

To help you decide which personal loan is right for you, we’ve created a ranking system to help you compare loans.

Our editors objectively compare personal loans and rank them on several benefits and features to give you an overall rating of how useful each loan might be.

Our ratings

We rate personal loans using a system of one to five stars.

★★★★★ — Excellent

★★★★★ — Good

★★★★★ — Average

★★★★★ — Subpar

★★★★★ — Poor

Keep in mind, however, that our “top” picks may not always be best for you. Based on your situation, you may find certain features to be more or less important, so compare your options before you apply. While we looked at a range of personal loans available for our “top” picks, we did not compare all the products available in the market.

How we rank personal loans

We consider 9 factors when comparing personal loans.

How we rate minimum loan amounts

★★★★★ — Under $300

★★★★★ — $300 to $500

★★★★★ — $500 to $1,000

★★★★★ — $1,000 to $2,000

★★★★★ — $2,000+

Typically, personal loans start around $500 or $1,000. We consider any starting amount under $300 to be the most competitive and worthy of 5 stars, since it provides the most flexibility for borrowers.

How we rate maximum loan amounts

★★★★★ — $50,000+

★★★★★ — $25,000 to $49,999

★★★★★ — $15,000 to $24,999

★★★★★ — $10,000 to $14,999

★★★★★ — $9,999 and under

Most lenders cap out at around $50,000. We gave the highest rating to any lender that offers loans at or above this range. The lowest rating goes to lenders that offer loans under $9,999, since that meets fewer needs.

How we rate turnaround time

★★★★★ — Same day

★★★★★ — 1 to 2 business days

★★★★★ — 3 to 5 business days

★★★★★ — Over 5 business days

Turnaround time is how long it takes to get a loan from the moment you start an application to the moment the money appears in your bank account.

The most common turnaround time for a personal loan provider with an online application is one or two business days. Lenders that beat that with same-day financing earn a perfect score. Those that lag behind didn’t do as well.

How we rate minimum APRs

★★★★★ — Below 5%

★★★★★ — 5% to 6.99%

★★★★★ — 7% to 10.99%

★★★★★ — 11% to 20.99%

★★★★★ — Over 21%

The most competitive starting APRs clock in somewhere under 5%. Any lender with an APR starting above 21% is considered to be a bad deal — your credit card might have a better rate.

How we rate maximum APRs

★★★★★ — Below 18%

★★★★★ — 18.01% to 25%

★★★★★ — 25.01% to 30%

★★★★★ — Over 30%

Chances are you’re not going to get the lowest rate a lender offers, which is why we consider the entire range. Personal loan providers rarely offer APRs above 46.99%, which is where most lenders top off. Because 46.99% APR caps are so common, we didn’t give anyone a 1-star rating for hitting this ceiling.

Any lender with an APR cap below 18% means all customers get a better deal than most credit cards — earning it the full 5 stars.

How we rate fees

★★★★★ — No fees at all

★★★★★ — No origination fees, but late and NSF fees

★★★★★ — Origination, late and NSF fees

★★★★★ — Prepayment penalties, origination, late and NSF fees

Lenders that charge no fees at all — including late and nonsufficient funds (NSF) fees — earn 5 stars. We weigh any origination, processing or application fee the same, since lenders typically charge the same amount if they charge one of these fees at all.

Penalties for paying off your loan early earn a provider the lowest rating since it limits borrowers flexibility to pay back early and save money.

How we rate customer reviews

★★★★★ — Excellent customer service

★★★★★ — Good customer service

★★★★★ — Average customer service

★★★★★ — Subpar customer service

★★★★★ — Poor customer service

This rating is optional, since not all lenders have enough online reviews to give a meaningful picture of the customer experience. It only applies if a lender has over 100 reviews on Trustpilot or the Better Business Bureau (BBB). We use the customer review rating from whichever site has the highest number of reviews.

How we rate the online application

★★★★★ — Has an online application

★★★★★ — Doesn’t have an online application

If a lender has an online application, it earns 5 stars. If you can’t apply online or have to visit a branch to finish your application, it earns 1 star.

How we rate perks

★★★★★ — Offers at least two types of perks

We judge perks as a bonus factor. If a lender checks off two of these three categories, it earns an extra 5 stars. Otherwise, it doesn’t factor in to the rating.

Flexibility

  • Leniency for financial hardship
  • Option to skip a payment
  • Ability to change your repayment due date

Mentorship

  • Access to financial tools
  • Access to an advisor
  • Financial education and advice

Tech

  • Ability to pay online
  • Option to set up autopay
  • Mobile app available

What we don’t consider

Our star ratings can tell you how a lender stands up to the competition. But what it can’t tell you is if it’s the right loan for your specific needs. In addition to our star rating, you might also want to look at the following factors before you fill out an application:

  • Availability. Some lenders don’t operate in all provinces and territories, meaning they might not be available to you.
  • Terms and monthly cost. Your term is how long you have to pay off a loan and is a major factor in your monthly cost. Use our monthly payment calculator to find out if a lender offers terms that fit your budget.
  • Products offered. Some lenders will only offer unsecured personal loans, while others will also have access to secured loans, installment loans and lines of credit.
  • Credit requirements. Some lenders might be better for applicants with different types of credit scores. Most require good credit at a minimum, but some might specialize in loans for fair- or bad-credit borrowers.
  • Other eligibility requirements. Lenders typically have minimum income requirements, minimum time in current employment, and other requirements that can affect how easy it is to qualify for a loan.
  • Specialties. Some lenders might specialize in a specific type of personal loan and offer services to make the borrowing process easier. For example, those specializing in debt consolidation might directly pay off your creditors for you.

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